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IRS Notice CP 90: What It Is and What to Do If You Get One

October 07, 2014  |   Tax Advice   |   Tags: , ,  

The IRS is the most powerful collection agency in the world. While many collection agents will simply call and nag a debtor for money, the IRS will forcibly take funds or property from a taxpayer to satisfy a debt. The CP 90 Final Notice of Intent to Levy and Notice of Your Right to a Hearing is the taxpayer’s warning that the IRS is preparing to take just this type of action. This is a warning that should be taken very seriously.

irs noticeThe IRS sends out the CP 90 via certified mail. This means that the recipient has to sign for the letter, either at the door or at the post office. The reason the IRS does this is to show that they made every possible effort to reach the taxpayer. Some people avoid picking up certified mail from the post office, because they mistakenly believe that the IRS will not take any action if the mail is never opened. It is imperative that any IRS certified mail be opened right away, as the letter is simply an IRS protocol to inform the taxpayer of the impending action.

In the case of a Final Notice of Intent to Levy, the IRS states that the taxpayer has 30 days from the date on the notice to either resolve their tax debt in full or enter into a formal agreement. Failure to respond or comply will result in the IRS seizing money and/or assets; put simply, this could be anything. An individual’s paycheck, checking account, or benefits are all at risk. Anything that has the taxpayer’s name attached to it, the IRS can collect on. In the case of a bank levy, this often means that an entire account is emptied up to the total amount of the debt.

Obviously, the best way to avoid this type of action is to pay the tax debt in full before the 30 day time period has run out. Sometimes, though, this simply is not feasible. The tax debt may be too high or the person may be experiencing a financial hardship. In this case, it is best for the taxpayer to contact a reputable tax professional who can put IRS collection actions on hold while determining a formal resolution. They can also look over a client’s finances and IRS problems, and find the best possible solution to the problem.